I did a quick search and I couldn't find anything quite like this so I thought I would submit it.
software name: Linux Live USB Creator
url: http://linuxliveusb.com/
licence: GPL v3
discription:
Linux Live USB Creator is a free software for Windows that allows you to create a bootable Live USB key with a Linux on it.
This software also offers an exclusive option of automatic virtualization to directly run Linux in Windows without any configuration nor installation.
* create bootable Live USB of Ubuntu, Fedora, Debian, Damn Small Linux, Puppy
Linux and many others !
* enable persistency of your data
* launch Linux directly in Windows with a special Portable VirtualBox
* hide created files on the key
Anybody can use Linux Live USB Creator. It's really easy to use and you don't have to be a computer geek !
there is no big point to make that portable on itself. This is a utility, which can be run from a stick, but it should be run from the harddrive, since it needs to download copy of virtual box and copy of some linux like ubuntu and then it will format the stick and install the virtual box and then the linux distro into it.
So be careful if you run it from a stick , this might also try to reformat it ...
And if you try to install the virtual box and linux onto a stick with yur portable apps on it, then they will be gone after that.
Otto Sykora
Basel, Switzerland
If i remember rightly a portable Linux has been asked quite a lot already and i think somebody is already working on one atm
Remember google is your friend.
The ability to boot to USB needs to be enabled for this to work. some schools, libraries or computers cannot boot to USB for a variaty of reasons including security, lazyness or because the computer just doesnt support it.